Amid the firm spotlight in recent weeks being pointed towards the snap general election, 2017 to date has also been an incredibly important year for apprenticeships. By the end of May, all employers operating in the UK with a pay bill of over £3 million each year will have made their first payment into the new apprenticeship levy, of 0.5 per cent against their annual pay bill. The monies raised from this levy are designed to help fund the development and delivery of small business apprenticeships, aiming ultimately to improve both the quality and quantity of those available.
With the government setting out a commitment to reach three million apprenticeship starts by 2020, the introduction of the levy is seen as a key means to help deliver this goal, as well as help to solve years of chronic underinvestment in skills.
But while the levy payments themselves are being made by some 20,000 businesses throughout the UK, the funding that will accrue can benefit companies of all sizes. SMEs have a vital role to play in helping the government achieve its new starts target for apprenticeships, and in the success of the system overall. Clearly with SMEs making up 99 per cent of all businesses, that is a significant pool from which to help drive up small business apprenticeship numbers.
Appealing to the worker and to the workplace
Small business apprenticeships are mutually beneficial for employer and new apprentice alike. For the apprentice themselves, the scheme can offer a route directly into the workplace, offering the training and skills to become work-ready in your chosen profession while earning a wage along the way.
For school leavers, apprenticeships offer a non-degree pathway to employment, saving many thousands of pounds of university debt, and according to our research one in two 16-18 year olds are now considering apprenticeships as their route into employment.
In addition, increasingly apprenticeships are appealing to people changing careers in later life, as there’s no upper age limit. Indeed, in an ‘Accelerated Ambitions’ report AAT issued in March, 45 per cent of young adults who already hold a degree told us they would consider doing an apprenticeship in the future, either to gain additional qualifications or to help enter a different career. Small business apprenticeships are also by no means just for new staff; instead they can be used to upskill your existing employees, developing career improvement opportunities and greater retention. For example, if you have a need to develop an employee’s financial skills and knowledge, there are apprenticeship schemes and qualifications available that can help with this.
For non-levy paying employers, the scheme – and the levy – holds many benefits. For example, for apprentices you may wish to bring in who are aged 19+, the Government will provide a 90 per cent funding contribution towards their training and your business will be asked to contribute the remaining 10 per cent.
The government will contribute 100 per cent of funding for 16-18 year olds. This means there is a huge incentive here for small businesses wishing to bring in apprentices at the start of their career, as there is no cost to you regarding activity directly related to their apprenticeship scheme – you only need to pay their salary. The funds provided must only be used to pay for training and assessment. This includes the new end-point assessments required for apprentices to gain an apprenticeship which is eligible for funding, up to the limit of various funding bands.
From 2018, you’ll be able to use the new online apprenticeship service to pay for apprenticeship training and assessment. In the meantime, you’ll need to agree a payment schedule direct with a training provider to deliver the apprenticeship training. Once you have done this, the government will pay its own contribution. Don’t lose sight of the fact that your business may also be eligible for a grant through the National Apprenticeship Service.
How to make small business apprenticeships a reality
If you’re thinking about bringing an apprentice on board, or offering an existing member of staff the opportunity to take part in one. You might want to consider the following:
Firstly, you’ll want to talk to other staff members to determine how best an apprentice can benefit your business both in the short and long term. This will help provide a benchmark to help you determine the success of the scheme, as well as making it easier to take on the right candidate.
Next, you’ll need to find the right training provider to run the programme on your behalf. Take the opportunity to research registered providers in your sector, what they specialise in, and their credentials. The best providers will partner with you to advise on how they can help achieve your specific objectives, and deliver the most relevant training.
Finally, remember that through establishing a strong scheme, you will be potentially bringing in the next generation of employees for your business. Ensure therefore that the recruitment of apprentices isn’t done lightly or in haste, but instead identify those candidates who can become valuable assets.
Creating a trailblazing pathway into the future
Apprenticeship reforms during 2017 aren’t just restricted to the levy. Over the summer, new employer-led trailblazer apprenticeship standards are being rolled out, with the aims of refocusing and increasing the effectiveness of apprenticeship training. In each industry, trailblazer apprenticeships have been put together by groups of employers who have come together to create standards appropriate to their sector, increasing the flexibility of the scheme’s delivery; streamline and simplify funding; and refocus training.
The new standards can be searched for via Informi, a website offering free practical tools for small businesses. Businesses will have greater responsibility for the management of learning, development and assessment of apprentices, assisted by training providers who will also help ensure the quality and consistency of the programme being taught. Apprentices may be able to benefit from gaining high-quality qualifications upon completing their apprenticeship, which are set to serve them well throughout their careers.
Making apprenticeships work for you and your business
Small business apprenticeships are a cost-effective way to addressing the needs of all businesses for future skills and talent. In our recent survey, just over half of recruitment experts informed us that apprentices taken on in the past five years had performed better than those with a degree (compared to just five per cent who believed the reverse to be true). And with apprenticeship figures set to rise over the coming years, the quality of talent available is also set to improve.
Establishing a high-quality scheme can help provide the right people for your business and create an excellent long-term investment for you, not to mention putting the apprentice themselves en-route to a rewarding and fulfilling career.
Rob Alder is AAT’s head of business development. To find out more about the new apprenticeship reforms, head to train.aat.org.uk/.